The Advance Estimates of GDP, which estimates economic growth at 4.9 per cent in 2013-14, while still below potential, is as per expectations and in line with our own forecasts said Chandrajit Banerjee, Director General, CII.
With demand not showing visible signs of a pick up owing to weak consumption, investment and government expenditure, the green shoots of recovery have yet to become apparent. What is worrisome is the poor performance estimated in the mining and manufacturing sectors which are in the red. The growth rate would have been lower had it not been for the favourable base effect of last year.
According to CII, the government should do more to boost consumption and investment demand to get growth back on track.
The current growth numbers makes it imperative for the government to do more to get the stalled projects get off the ground, both in the infrastructure and manufacturing sectors, remove hurdles in the mining sector and create a conducive environment for the revival of the manufacturing sector, all of which require non-legislative action in the election year.
Additionally, reform measures are also required for augmenting public investment in infrastructure, ploughing back unutilized surplus funds in the public sector into the economy and substituting subsidies with direct benefit transfer.
The government policies should also be supplemented by an accomodative monetary policy to revive demand. CII believes that performance in the next quarter would be better, said Banerjee.
